May-ja Vu

Nov. 22, 2010 4:40 PM ET

Negative and uncertain headlines out of Europe, Governments are predicted to be on the verge of collapse, sovereign debt spreads are at wides, news commentators are fearful, the euro is on the verge of breaking up, people know where Portugal is again. Is it May 2010 or is it simply, “May-ja Vu”?

Are we really going to go through this again. Well if we are then I have to believe that the US markets are much better prepared, holders of sovereign debt have hedged to some higher degree than six months ago, the bailout mechanisms are in place now, the offsets to euro weakness are better understood (ie much improved German/European exports driving better economic performance), and finally the US economy is showing some tentative signs of life.

I am sticking by my prediction of a rally in US equity markets into year end and thus instead of calling this latest selloff May 2010 all over again, I will call it May-ja Vu.